Oil and Gas activities

Exploration and production

• Active portfolio management, including expansion of our position in Norway

Europe: The Mittelplate field off the North Sea coast is the cornerstone of our crude oil production in Germany. We own a 50% share in the development of this largest known oil deposit in the country. Some 30 million metric tons of oil have already been extracted there. We have completed and started up all 12 new wells at the Emlichheim site. A new drilling campaign with a total of five new production wells started at the Bockstedt oilfield. The first wells have already started operation. We conducted a seismic survey at the Landau concession in early 2017 and are currently evaluating the results.

In Norway, oil production from the Maria field in the Norwegian Sea started in 2017. It is the first project in Norway that Wintershall has operated from the discovery of the field to the start of production. Rather than building a new production platform, we implemented an innovative development concept for Maria: The production equipment was installed directly on the seabed and connected underwater with three nearby platforms operated by our cooperation partner Statoil. Production started a year earlier than originally planned and costs were more than a fifth lower than expected. Development of the Ivar Aasen and Edvard Grieg fields continued with additional wells drilled. As the operator of the Nova field (previously: Skarfjell), we are in the process of finalizing the development concept. This proposes to connect the oil and gas reservoir with the nearby Gjøa platform via a subsea tieback. In January 2017, Wintershall was granted shares in five new exploration licenses on the Norwegian continental shelf from the Ministry of Petroleum and Energy. Wintershall will take over operatorship of two licenses.

In early 2017, Wintershall Noordzee B.V., Rijswijk, Netherlands, started production from the Ravn oilfield as operator. It is the first oilfield operated by the company in Denmark. Technical difficulties arose in production in mid-August; we are still working on a solution.

Russia: The Yuzhno Russkoye natural gas field in western Siberia, in which Wintershall has a 35% economic interest, has been producing at plateau since 2009. We hold a 50% share in the development of Block IA of the Achimov formation in the Urengoy field in western Siberia. The gradual development of this field was continued and 88 wells were producing at the end of 2017. We will develop blocks IV and V of the Achimov formation with our partner Gazprom. We are also active in exploration and production in the Volgograd region together with the LUKOIL group.

North Africa / Middle East: In Libya, we are the operator of eight oilfields in the onshore concessions 96 and 97. Crude oil production was temporarily suspended in both concessions in March 2017. Based on an agreement with the government-owned National Oil Corporation (NOC), we were able to resume production from June to October: 55,000 barrels of oil per day (BOPD) for concession 96 and 10,000 BOPD for concession 97. Production in concession 96 then halted due to a strike. We are currently negotiating with NOC on the framework of our future cooperation. At the Al Jurf oilfield off the coast of Libya, in which we hold a share, operations could be continued without interruption in 2017.

In Abu Dhabi, Wintershall successfully completed the first offshore exploration well in the Shuwaihat field.

South America: We hold shares in a total of 15 onshore and offshore fields in Argentina. In the Neuquén province, we drilled three pilot wells as an operator in the Bandurria Norte block. The first exploration well in the CN-V block in the Mendoza province found oil. In Tierra del Fuego, work began on the expansion of the gas treatment facilities for the Cuenca Marina Austral 1 concession.

In the Neuquén province, Wintershall reduced its interest in the Aguada Pichana concession. Its share in the Aguada Pichana Oeste (West) block was sold to Pan American Energy LLC, Buenos Aires, Argentina, and YPF S.A., Buenos Aires, Argentina. Wintershall reduced its interest in the Aguada Pichana Este (East) block through the sale of shares to Total Austral S.A., Buenos Aires, Argentina, at the beginning of 2018.

Natural gas transportation

• Mostly regulated business with stable framework
• Construction of European gas pipeline link (EUGAL) planned
• Contribution to financing of the project company Nord Stream 2 AG

The largey regulated natural gas transportation sector is characterized by stable conditions and yields based on approved costs and tariffs. Our organizational structure meets the unbundling requirements set down by the German Energy Act.

As an indirect holding company for the German subsidiaries in natural gas transportation, WIGA Transport Beteiligungs-GmbH & Co. KG (WIGA) mainly fulfills a reporting and financing function. GASCADE Gastransport GmbH, OPAL Gastransport GmbH & Co. KG, and NEL Gastransport GmbH all act as independent companies under the umbrella of the WIGA group.

In August 2017, we established W & G Infrastruktur Finanzierungs-GmbH as an intermediate holding company and contributed GASCADE Gastransport GmbH and NEL Gastransport GmbH to it. The intermediate holding company performs WIGA’s financing function for the two companies and is accounted for in the BASF Group’s financial statements using the equity method.

The companies under the WIGA umbrella operate a 3,300-kilometer long-distance pipeline network that includes links to the Nord Stream pipeline, the Baltic Sea Pipeline Link (OPAL) and the North European Gas Pipeline (NEL).

GASCADE Gastransport GmbH plans, as project developer, to construct the 485-kilometer European gas pipeline link (EUGAL), which will extend from the Baltic sea in northern Germany to the Czech border. Its maximum annual transportation capacity of 51 billion cubic meters is to be achieved in two phases by 2020. The project will be implemented under a fractional ownership agreement with our partners Fluxys Deutschland GmbH, Düsseldorf, Gasunie Deutschland Transport Services GmbH, Hannover, and ONTRAS Gastransport GmbH, Leipzig, each of which holds a 16.5% share.

We hold a 15.5% share in the Nord Stream pipeline that started up in 2011 through Nord Stream AG, based in Zug, Switzerland, which is accounted for in the BASF Group’s financial statements using the equity method. Other shareholders are the Gazprom (51%), E.ON (15.5%), N.V. Nederlandse Gasunie (9%) and ENGIE (9%) groups. With a total capacity of 55 billion cubic meters of natural gas per year, this pipeline, which stretches from Russia to the German coast over the Baltic Sea, helps strengthen the security of supply in Europe.

Wintershall is contributing to the financing of the new Nord Stream 2 project as a co-creditor. Its implementation will strengthen infrastructure and security of supply in Europe, which is particularly important given the decline in production there. Together with the ENGIE, OMV, Royal Dutch Shell and Uniper groups, Wintershall signed long-term financing agreements with the project company Nord Stream 2 AG, Zug, Switzerland, on April 24, 2017. The five European energy companies committed to long-term financing of 50% of the entire project costs, which are currently estimated at €9.5 billion. Wintershall will provide up to €950 million. As of December 31, 2017, €324 million of this amount had already been called up. Gazprom is the sole shareholder of the project company Nord Stream 2 AG.